AngloGold Ashanti reports it has signed the regulatory and fiscal agreements with the Government of Ghana that will provide the framework for the redevelopment of the Obuasi gold mine.
The Government of Ghana and AngloGold Ashanti have put in place several agreements including a Development Agreement, Tax Concession Agreement, Security Agreement and a Reclamation Security Agreement. The Environment Impact Assessment process has been completed and the permits are expected shortly. Two documents – the Tax Concession Agreement (TCA) and the Development Agreement (DA) – must now both be ratified by Ghana’s Parliament to be made effective.
Obuasi has been in limited operating phase since 2014, and the Government’s support, says AngloGold Ashanti, will go a long way to enabling it to restart as a modern, productive, long-life high margin operation.
“Redevelopment of the Obuasi mine will establish Obuasi as a world-class operation rejuvenating the proud gold mining history of the Ashanti region in Ghana,” says AngloGold Ashanti CEO Srinivasan Venkatakrishnan. “Obuasi now has the mine and labour plan, geological understanding and social model to match its world-class, high-grade ore body. The project metrics show a high-return, long-life project that not only brings ounces to account quickly and profitably, but also offers attractive returns on our investment.”
AngloGold Ashanti has conducted a feasibility study into the redevelopment of Obuasi. The study tested the viability of redeveloping the high-grade Obuasi ore body, which has 5,8 Moz of ore reserves and 34 Moz in mineral resource, to create a safe, long-life mining operation that is productive and profitable. The outcomes of the TCA and DA have been applied to the feasibility study.
The redevelopment will establish Obuasi as a mechanised underground mining operation. The approach to redeveloping the Obuasi mine is a fundamental departure from how the mine was operated in the past. The redevelopment makes use of automation and controls for improved operational efficiencies and consistency in performance.
The project implementation will be undertaken in two distinct phases, with stage one comprising project establishment, mine rehabilitation and development, plant and infrastructure refurbishment to enable production at a rate of 2 000 tonnes per day for the first operating year. This is expected to take roughly 18 months, with the first gold pour expected in the third quarter of 2019.
The second phase includes refurbishment of the underground materials handling system, shafts and ventilation; and construction of the primary crusher, the SAG/ball circuit, carbon regeneration, a new gold room and tailings storage facility. This expected to take a further 12 months and enable the operation to climb to 4 000 tonnes per day. The operation is then expected to ramp up to 5 000 tonnes per day, over the following three years.
Mine production for the first 10 years will be focused on the upper ore bodies and is expected to average 350 000 oz to 450 000 oz at an average head grade of 8,1 g/t. In the second 10 years, production averages 400 000 oz to 450 000 oz. Total cash costs are expected to average between US$590/oz to US$680/oz, while All-in Sustaining Costs are expected to be between US$750/oz to US$850/oz.
The project delivers internal rates of return of between 16 % and 23 % at real gold prices of between US$1 100/oz and US$1 240/oz and is highly leveraged to the gold price.
Initial project capital expenditure anticipated over the first two and half years is estimated to be between US$450 million and US$500 million. After the completion of phase two, extended project capital expenditure of US$94 million is expected to continue through to year six, covering the development of the Obuasi Deeps Decline to the lower level of the mine, refurbishment of the KMS shaft, installation of new underground pump stations and construction of the flotation tailings storage facility.
